RE: RE: RE: Hanwei's only wind customerWith the recent government approval noted in my last post, in addition to the government subsidies, China Wind looks like they are well on their way again.
Hanwei to date has only delivered 40 turbines, all which were delivered in 2008. Out of the 40 turbines delivered, 34 of them were for China Wind's phase 1, which has commenced commercial production. Phase two consists of a total of 35 turbines, which means Hanwei still has 29 more to deliver for phase 2.
Phases 3-5 consist of 299 turbines and has an expected finish date of 2014. Now considering each turbine at roughly $1million and each blade set at $200k, that is a lot of potential revenue for Hanwei. Supposedly, there is another supplier for China Wind, but they have not delivered anything to date.
This being said, I still think Hanwei is undervalued without even considering their wind business. Not even considering the potential growth (think China, alternative energy), I stil conservatively value Hanwei at 1.50/share. Historically, they have traded at 4 times and 3.5 times NCAVPS and Book Value/Share, respectively. Currently, they are trading at .9 and .34 their NCAVPS and Book per Share, respectively (as per their last quarter).
Buying at these prices gives you a large margin of safety.
The negatives...... Management were way too optimistic last year in their revenue projections and let down shareholders (but gave us a great opportunity to buy). Also, the $1million write off related to the termination of it's plans to build a facility in Kazakhstan. That hurt...
Like I said previously, there will be brighter days ahead.
Good luck
Disclosure
I own shares in T.HE